Vestin reports net income growth in fourth quarter

Thursday, March 7, 2002 | 11:09 a.m.

Vestin Group Inc., a Las Vegas-based lender and commercial mortgage broker, reported substantial growth in earnings for the quarter ending Dec. 31.

The company reported net income of $1.85 million or 31 cents a share for the quarter vs. $662,000 or just under 1 cent a share in the year-ago quarter.

Revenue for the quarter increased to $7.7 million, a 62 percent increase from the $4.8 million the company posted in the same quarter a year ago.

Vestin also said it would distribute one third of its fourth-quarter earnings to shareholders through a cash dividend of 10 cents a share.

The company said its Vestin Fund I has 36 loans totaling $97.9 million in its portfolio, with an average maturity of 14 months and an average annual interest rate of 13.13 percent.

A company statement said Vestin Fund I paid its investors an average yield of 13.1 percent in February.

The company said Vestin Fund II has 48 mortgage loans totaling about $156 million with an average maturity of 11 months and an average interest rate of 13.43 percent, with investors receiving a weighted average yield of 13.22 percent in February.

Lance Bradford, Vestin's president and chief financial officer, attributed the rise in earnings and revenues to the lender's advertising campaign.

A year ago, the company signed football great Joe Namath to pitch its product nationwide. The company pays Namath $1 million a year. Bradford said between Namath's fee and a national media-buying campaign, the firm spent $5.5 million more on advertising in 2001 than it did in 2000. Bradford said part of the company's strategy is to make extensive media buys while ad rates remain depressed nationwide.

Mike Shustek, Vestin's founder, said people's concerns about Sept. 11 slowing development and affecting Vestin's bottom line haven't materialized.

"Business has never been better," Shustek said. "Prior to 9-11, we were receiving 50 or 60 loan requests every five weeks. Now we're up to 60 loan requests every three weeks."

Shustek also said the company is averaging $900,000 a day in private investor dollars coming into its Vestin II fund.